Brazil Raises Tariffs on Imported Toys by 15%

04 January 2011

On December 29th, Brazil increased tariffs on toy imports from 20% to 35%. The move marked the third time in eight days that the South American nation launched a trade-remedy case against imports in a bid to help Brazilian manufacturers gain a competitive edge.

Duties on 14 types of toys, ranging from dolls and puzzles to tricycles and electric train sets, will increase to 35% from 20% until the end of 2011, according to the Foreign Trade Chamber. The higher tariffs will affect goods whose imports totaled $290 million between January and November of 2010.

Argentina, Uruguay and Paraguay have agreed to raise their duty rates on toys as well; the four Mercosur countries are working on a plan for an integrated production system of toys in order to reduce the cost of the finished product being assembled in one of the four countries. This new production system is intended to make the Mercosur toy industries competitive with China.

The decision to increase tariffs came after Brazilian toymakers urged the Chamber to help them “fight” a surge in Chinese imports, boosted by the yuan’s competitive exchange rate. Brazilian imports of Chinese goods in the 12 months through August 2010 increased 37% to $21.4 billion, from $15 billion in all of 2009.